So for a brief window on Sunday, it seemed the government was considering buying “toxic” assets from Citigroup to get them off of its books. (See the first update in this CNBC story. HT2 CalculatedRisk via MR.) You know, the original rationale for the $700 billion, and then the one that Paulson just two weeks ago said he wasn’t going to ever use because he knew when Congress passed it that it wouldn’t work.

Why the switch-switch-switcheroo? I don’t know, but Robert Wenzel predicted the Citi bailout would be special because of its ties to Goldman Sachs. Maybe Paulson & Friends figured the asset buyout would be a great idea if they could limit it to one “special” company and give really good prices.